# G.M., Modipon Fibre Co v. Narendra Pal Gahlot

- **Citation:** (2002) 3 ILRA 917
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 1999-02-11
- **Case number:** Special Appeal No. 803 of 1993
- **Bench:** S.K. Sen, C.J. R.K. Agarwal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/g-m-modipon-fibre-co-v-narendra-pal-gahlot-40035
- **Pages:** 11

## Headnote

Constitution of India- Article 226 read
with Article 12- Maintainability- worker
challenged dismissal order- passed by
G.M.-;
Modipon
fiber
Company-
manufacturing not a statutory company
created under any statute- may be public
share
holder,
but
business
of
manufacture and sale of fibers is not a
public
purpose-
writ
petition
not
maintainable.

Held- Para 17

We find that it is not in dispute that
Modipon Fiber Company is a company
incorporated under the Companies Act
and carries its activities in accordance
with the various enactments. It is not a
statutory company as it has not been
created under any statute to carry out
any specific purpose, though it may be a
public company commonly understood in
which
the
public
may
be
share
holders/member, but it does not get the
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918 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
status of statutory company/corporation
owned or controlled by the State. On the
other hand it is engaged in the business
of manufacture and sale of fibres, which
is carried out by the company is not as a
result of any statutory provision. In the
case of V.S.T. Industries Ltd. (supra), a
question
arose
before
the
Hon'ble
Supreme Court as to whether a company
which is engaged in manufacture and
sale of cigarette involved any public
function so as to make it amenable to
writ jurisdiction under Article 226 of the
Constitution of India. The Apex Court
laid down the principles when an activity
of a private body can be said to public
function and subject matter of judicial
review.
Case law discussed:
JT 2001 (c) SC-36, 2000 (3) AWC -1800, 1990
(3) UPLBEC-1727, AIR 1975 SC-238, 1991 (2)
UPLBEC-898 (FB), JT 1998 (8) SC-204, 2001
(3) UPLBEC 571, 1984 (3) SCC 369, JT 1993
(3) SC 617, AIR 1991 SC-101

## Text

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3 All] G.M., Modipon Fibre Co. V. Narendra Pal Gahlot 917
including the duty paid on delivery of
goods in the trading account in April,
1987, and before the actual delivery of the
goods, the value of the goods and custom
duty paid thereon was shown in the
balance sheet as document in hands,
therefore the deduction should be allowed
in the assessment year 1988-89, is
contrary to the prescription of law.
Section 43-B in clear terms provides that
the deduction claimed by the assessee in
respect of any sum paid by way of tax,
duty, cess or fee, shall be allowed only in
computing the income referred to in
Section 28 of that previous year in which
it was actually paid, irrespective of the
previous year in which the liability was
incurred for payment of such sum as per
method of accounting regularly employed
by the assessee. For the purpose of
claiming benefit of deduction of the sum
paid against liability of tax duty, cess, fee
etc. the year of payment is relevant and is
only to be taken into account. The year in
which the assessee incurred the liability to
pay such tax, duty etc. has no relevance
and cannot be linked with the matter of
giving benefit of deduction under Section
43-B of the Act. In this view of the
matter, the appeal deserves to be allowed.

11. In the result, the appeal succeeds
and is allowed. The impugned order of the
learned Income Tax Appellate Tribunal
dated 11.2.1999 in ITA No. 6797/D/92
for the assessment year 1988-89, and the
order of the learned Commissioner of
Income Tax (Appeals), Bareilly dated
6.7.1992 in Appeal No. 13/OC (A)
MBD/90-91 are set aside. There shall,
however, be no order as to costs.
---------

APPELLATE JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD NOVEMBER 15, 2002

BEFORE
THE HON'BLE S.K. SEN, C.J.
THE HON'BLE R.K. AGARWAL, J.

Special Appeal No. 803 of 1993

General Manager, Modipon Fibre Co.

 ...Appellant
Versus
Narendra Pal Gahlot
 ...Respondent

Counsel for the Appellant:
Sri V.B. Singh
Sri P.S. Baghel
Sri Vijay Sinha
Sri Ravi Agarwal

Counsel for the Respondent:
Sri R.N. Singh
Sri A.K. Singh
Sri Prakash Gupta

Constitution of India- Article 226 read
with Article 12- Maintainability- worker
challenged dismissal order- passed by
G.M.-;
Modipon
fiber
Company-
manufacturing not a statutory company
created under any statute- may be public
share
holder,
but
business
of
manufacture and sale of fibers is not a
public
purpose-
writ
petition
not
maintainable.

Held- Para 17

We find that it is not in dispute that
Modipon Fiber Company is a company
incorporated under the Companies Act
and carries its activities in accordance
with the various enactments. It is not a
statutory company as it has not been
created under any statute to carry out
any specific purpose, though it may be a
public company commonly understood in
which
the
public
may
be
share
holders/member, but it does not get the
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918 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
status of statutory company/corporation
owned or controlled by the State. On the
other hand it is engaged in the business
of manufacture and sale of fibres, which
is carried out by the company is not as a
result of any statutory provision. In the
case of V.S.T. Industries Ltd. (supra), a
question
arose
before
the
Hon'ble
Supreme Court as to whether a company
which is engaged in manufacture and
sale of cigarette involved any public
function so as to make it amenable to
writ jurisdiction under Article 226 of the
Constitution of India. The Apex Court
laid down the principles when an activity
of a private body can be said to public
function and subject matter of judicial
review.
Case law discussed:
JT 2001 (c) SC-36, 2000 (3) AWC -1800, 1990
(3) UPLBEC-1727, AIR 1975 SC-238, 1991 (2)
UPLBEC-898 (FB), JT 1998 (8) SC-204, 2001
(3) UPLBEC 571, 1984 (3) SCC 369, JT 1993
(3) SC 617, AIR 1991 SC-101

(Delivered by Hon'ble R.K. Agarwal, J.)

1. The General Manager, Modipon
Fiber
Company,
Modinagar,
district
Ghaziabad have filed Special Appeal Nos.
803, 804 and 809 of 1993 against the
judgment and order dated 1.11.1993
passed by the learned Single Judge in
Civil Misc. Writ Petition No. 18116 of
1993, 18117 of 1983 and 18118 of 1993,
whereby the learned Single Judge had
allowed the writ petitions filed by
Narendra Pal Gahlot, respondent writ
petitioner in Special Appeal Nos. 803 of
1993, Om Pal Singh Chauhan, respondent
writ petitioner in Special Appeal No. 809
of 1993 and Atar Pal, respondent writ
petitioner in Special Appeal No. 804 of
1993.

2. Special Appeal No. 413 of 1998
has been filed by Dharam Vir, Rajendra
Sharma,
Hari
Ballabh
Maheshwari,
Suresh Sharma and Ahibaran Singh
against the judgment and order dated
27.4.1998 passed by the learned Single
Judge whereby the Civil Misc. Writ
Petition No. 30351 of 1993 filed by them
has been dismissed.

3. Special Appeal No. 415 of 1998
has been filed by Jasveer Singh, Mool
Chandra Gupta and Hari Mohan Goyal
against the judgment and order dated
27.4.1998 passed by the learned Single
Judge in writ petition No. 054 of 1993
wherein the learned Single Judge has
dismissed the writ petition following the
judgment and order passed in writ petition
no. 30354 of 1993, Raj Kumar and others
v. State of U.P. and others, decided on
27.4.1998 itself.

4. Since all these special appeals
involve a common question of law, they
have been heard together and are being
decided by a common judgment.

Briefly stated that facts giving rise to
all these special appeals are as follows:

5. All the writ petitioners claim
themselves
to
be
the
permanent
employees of Modipon Fiber Company,
Modinagar,
district
Ghaziabad
(hereinafter referred to as the Company).
Their services were terminated under
clause 19 (a) (bb) of the Certified
Standing
Orders.
Alongwith
the
termination order the company sent a
bank draft to each of the petitioners the
amount due upto the date of termination
of their services in lieu of notice to pay
retrenchment compensation under section
6-N of the Industrial Disputes Act, 1947
and in lieu of notice under clause 19 (a)
(bb) of the Certified Standing Orders.
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3 All] G.M., Modipon Fibre Co. V. Narendra Pal Gahlot 919
6. The order of termination was
challenged before this Court by the
petitioners through various writ petitions.
The writ petition nos. 18116 of 1993,
18117 of 1993 and 18188 of 1983 were
allowed by this Court vide judgment and
order dated 1.11.1993 by holding that the
certified Standing Orders had statutory
effect and the order may be questioned
under Article 226 of the Constitution of
India, if they are illegal, arbitrary and
violative of the principles of natural
justice, equity and fair play. This Court
further held that the order of termination
has been passed without giving any
opportunity of hearing to the petitioners
and therefore, are violative of the
principles of natural justice. The Court
held the order of terminations as arbitrary
and quashed the same. However, Writ
Petition No. 30351 of 1993 and 30354 of
1993 were not decided alongwith the
earlier three writ petitions and were
decided subsequently, vide judgment and
order dated 27.4.1998. This Court relying
upon the decision of the Hon'ble Supreme
Court in the case of Rajasthan State Road
Transport Corporation v. Krishna Kant
reported in 1995 (5) SCC-75, dismissed
both the writ petitions on the ground that
the right which the petitioners claim
accrued under a composite statute which
provided for a forum of redressal
therefore the writ petition should not be
entertained. The Court further held that in
the present case the respondent company
would be deprived of the right to prove
their case in support of the impugned
orders by producing evidence unless the
parties are relegated to forum provided
under the U.P. Industrial Disputes Act.
The Court distinguished the earlier
judgment of the learned Single Judge in
the case of Narendra Pal Singh Gahlot on
the ground that these two objections were
not considered.

7. The Company has challenged the
judgment and order dated 1.11.1993
passed by the learned Single Judge
allowing the writ petition in Special
Appeal Nos. 803, 804 and 809 of 1003
whereas the judgment and order dated
27.4.1998 has been challenged by the
employees/petitioners in Special Appeal
Nos. 413 and 415 of 1998.

8. We have heard Sri Vijay Bahadur
Singh, learned Senior counsel assisted by
Sri P.S. Baghel and Sri Vijay Sinha,
learned Advocates for the Company and
Sri R.N. Singh, learned Senior counsel
assisted by Sri A.K. Singh for the
employees/writ petitioners.

9. Sri V.B. Singh, learned Senior
counsel submitted that the writ petitions
filed by the employees writ petitioners
was not maintainable as it had been filed
against M/s Modipon Fibers Company,
which is a purely private company and is
not a State within the meaning of Article
12 of the Constitution of India. In support
he relied upon the following decisions :

1.
V.S.T.
Industries
Ltd.
v.
V.S.T.
Industries Workers Union and another
reported in JT 2001(1) SC-36.
2.
Workmen
of
Pepsico
India
Holdings
Ltd.
v.
Deputy
Labour
Commissioner, Kanpur and another,
reported in 2000(3) AWC-1800.
3.
Heera Lal Sharma v. Indo Gulf
Fertilizers and Chemical Corporation,
Jagdishpur, district Sultanpur and
others, reported in (1990)3UPLBEC1727
4.
Rajpal
v.
Vice
Chairman
&
Managing director, Modi Rubber Ltd.
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920 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
and others (Civil Misc. Writ Petition
No. nil of 1993, decided on 9.12.1993.

10. He further submitted that the
employees writ petitioners have an
efficacious
alternative
remedy
to
challenge the order of termination by
raising an industrial dispute under Section
4-K of the U.P. Industrial Dispute Act,
1947 before the Labour Court as all of
them are workmen and therefore, the writ
petitions
filed
by
them
was
not
maintainable. In support thereof he relied
upon the following decisions:

1.
The Premier Automobiles Ltd. v.
Kamlakar Shantaram Wadke and others
reported in AIR 1975 SC-2238
2.
Chandra
Singh
v.
Managing
Director,
U.P.
Cooperative
Union,
Lucknow and others, reported in 1991
(2) UPLBEC -898 (FB).
3.
Scooters India and others v. Vijay
E.V. Eldred, reported in JT 1998 (8)
SC-204.

11. Sri V.B. Singh further submitted
that the Certified Standing Orders do not
have any statutory force or statutory effect
and therefore, neither its provision nor its
non compliance can be questioned under
Article 226 of the Constitution of India.
According to him any person aggrieved
can file an application for modification of
any of the clause of the Certified Standing
Orders under section 10 of the Industrial
Employment Standing Orders Act 1946.
He relied upon a decision of the Hon'ble
Supreme Court in the case of the
Rajasthan
State
Road
Transport
Corporation and another and Krishan
Kant and others, 1995 (5) SCC-75 and
submitted that now the Supreme Court
had held that the Certified Standing Order
have no statutory force.
12. According to him if the matter is
referred before the Labour Court, the
company will get an opportunity to justify
their action, as the Labour Court has full
powers and jurisdiction to hold the
enquiry itself and permit the parties to
lead evidence in case where no enquiry
has been held or the enquiry held is found
to be defective, which cannot be done by
this Court in exercise of powers under
Article 226 of the Constitution of India.
On merits, he submitted that the services
of the writ petitioners were terminated on
the ground of gross misconduct, as they
were found involved in theft and the
company had lost confidence and that is
why their services were terminated under
clause 19 (a)(bb) of the Certified Standing
Orders without any enquiry. He further
relied upon the decision of the Hon'ble
Supreme Court in the case of Municipal
Corporation Greater Bombay v. P.S.
Malvenkar and others, (1978) 3 SCC -78
and Bharat Forge Co. Ltd. v. A.B.Zodge
and another, (1996) 4 SCC -374. Thus, he
submitted that the learned Single Judge
had erred in law in allowing writ petitions
nos. 803, 804 and 809 of 1993 and
quashed the order of termination and
justified the judgment and order dated
27.4.1998.

13. Sri R.N. Singh , learned Senior
Counsel, however, submitted that the
employees- writ petitioners are permanent
employees/workmen in the company for
the last several years and without giving
any show cause notice or any opportunity
of hearing their services were terminated,
which is wholly arbitrary and is in utter
disregard and gross violation of principles
of natural justice, equity and fair play.
According to him, the Clause-19 (a) (b)
and 19 (bb) of the Certified Standing
Orders of the Company violates the
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3 All] G.M., Modipon Fibre Co. V. Narendra Pal Gahlot 921
fundamental rights guaranteed under
Articles 14, 16, 19 and 21 of the
Constitution of India and they are further
opposed to the Directives Principles of
State
Policy
as
enshrined
in
the
Constitution of India under Article 39 (a)
and 41 of the Constitution of India.

14. Sri R.N. Singh further submitted
that Modipon Fibers Company is a
registered public limited company under
the provisions of the Companies Act,
1956 and its activities are of vital national
importance and welfare of the State. The
employment in such a company is a
public employment and the property is a
public property, though it is not chartere
by
the
Crown
but
not
only
the
undertaking, but also the Society has a
stake in its proper and efficient working.
The service condition of those who
worked for them must be fair certain and
secular. Thus, it is having public duties
and responsibilities to perform and if need
arises, the Courts should lift the corporate
veil to ascertain its activities. According
to him, a writ can be issued to any official
of a society to compel him to carry out the
terms of the statute under or by which the
said Society is constituted or governed
and also to companies or Corporation to
carry out duties placed on them by the
statute authorizing their undertaking.
According to him a writ can also be
issued to companies constituted by the
Statute for the purpose of fulfilling the
public responsibilities. He submitted that
the writ petition filed by the employees
were fully maintainable under Article 226
of the Constitution of India, as this Court
has ample power under Article 226 of the
Constitution
of
India
to
exercise
jurisdiction over any proceeding for the
enforcement of fundamental rights. Thus,
he submitted that the learned Single Judge
was not justified in dismissing the two
writ petitions vide judgment and order
dated 27.4.98 on the ground of being not
maintainable. He further submitted that
the existence of alternative remedy in the
present case i.e. raising an industrial
dispute is not an absolute bar in
entertaining the writ petition under Article
226 of the Constitution of India, as this is
a
rule
of
policy,
confidence
and
distinction and not a rule of law and in
appropriate
cases
and
exceptional
circumstances, the Court can exercise its
powers
under
Article
226
of
the
Constitution of India. According to him,
alternative remedy would not operate as a
bar in cases where the writ petition is to
seek
enforcement
of
any
of
the
fundamental right, where there is a
violation of principles of natural justice or
where the order or the proceedings are
wholly without jurisdiction or the vires of
an Act is challenged. He relied upon a
decision of the Hon'ble Supreme Court in
the case of Whirlpool Corporation v.
Registrar of Trade Marks, Mumbai, 1998
(8) SCC-1 and a Division Bench decision
of this Court in the case of Pradeep
Kumar v. State Sugar Corporation and
others (2001) Vol. 3 UPLBEC-571.

It was further submitted that Article 226
confers wide power on the High Court to
issue writs in the nature of prerogative
writs. This is striking departure from the
English law. Under Article 226 writs can
be issued to 'any person' or authority. The
terms 'authority' used in the context must
receive a liberal meaning unlike the term
of Article 12 which is relevant only for
the
purpose
of
enforcement
of
fundamental rights as well as nonfundamental rights. Words 'any person or
authority' used in Article 226 are
therefore, not to be confined only to
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922 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
statutory authorities and instrumentality
of the State. They may cover any other
person or body performing public duty
and owing positive obligation to the
affected party. The duty on the person or
authority named (need) not be imposed by
Statute, and they are, amenable to writ
jurisdiction as held by the Hon'ble
Supreme Court in case of Andi Mikta
Sadguru Shree Muktajee Vandas Swami
Suwarna Jayanti Mahotsav Smarak Trust
and others v. V.R. Rudani and others
(1989) 2 SCC-691. It was also submitted
that Parliament enacted the Industrial
Employment (Standing orders) Act, 1946
(1946 Act in short), which provided that it
was an Act to require employment under
them. By section 3, a duty is cast on the
employer governed by the Act to submit
to the certifying Officer draft standing
orders proposed by him for adoption in
his industrial establishment. The standing
orders of the company has been duly
certified under the 1946 Act on 4.6.1970.
They have later amended terms and
conditions of the termination of services
by establishment on 19.12.1988, clause 19
(a), 19 (b) and 19 (bb) confer absolute and
unfettered discretions on the employer
which had become part of the statutory
terms and conditions of service between
the employers and his employees. It is
also relevant to state that the principle of
natural justice must be read into the
impugned standing orders. This Court can
lift the veil and can judge the fairness and
reasonableness under section 4 of the
Standing Orders Act 1946. Principle of
natural justice is that no man should be
condemned unheard intends to prevent the
authority to act arbitrarily affecting rights
of the concerned person. An order
involving civil consequences must be
made consistently with the rules of natural
justice under Article 14 as laid down by
the Hon'ble Supreme Court in case of
Sudhir Chandra Sarkar v. Tata Iron and
Steel Co. Ltd. and others (1948) 3 SCC369. It was further submitted that it is
well settled law that right to life enshrined
under Article 21 of the Constitution
would include right to livelihood. The
order of termination of services of an
employee visits with civil consequences
of not only his livelihood but also career
and
livelihood
of
dependents.
The
deprivation thereof must be in accordance
with just and fair procedure prescribed by
law, confirming to Articles 14 and 21 and
has to be just, fair reasonable and not
fanciful, oppressive or at vagary. The
principles of natural justice is integral part
of the guarantee of equality assured by
Article 14. Thus, rules set out in the
impugned standing orders are void and
ultra vires. The principles laid down by
the Hon'ble Supreme Court in case of
D.K.Yadav v. J.M. Industries Ltd. J.T.
1993 (3) SC-617 would be applicable. It
was further submitted that the termination
orders were passed by the respondent no.
2 in pursuance to terms and conditions of
termination
of
services
framed
in
certifying standing order in clause 19 (a),
19 (b) and 19 (bb) empowering the
respondent no. 2 to terminate the services
of permanent employees without giving
any reason and by giving notice, which is
void under section 23 of the Contract Act
as being opposed to public policy and is
also ultra vires and is unconstitutional. It
wholly ignores the audi alteram partem
rule. The principles laid down in the case
of Delhi Transport Corporation v. D.T.C.
Mazdoor Congress reported in AIR 1991
SC-101 is fully applicable to the present
case. It is also violative of directive
principles contained in Article 39 (a) and
41 of the Constitution of India and, it can
not be conferred on employees also. The
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3 All] G.M., Modipon Fibre Co. V. Narendra Pal Gahlot 923
Court, when called upon to do so, shall
strike down unfair and unreasonable
contract or unfair and fanciful clause in a
contract, entered into between the parties
who are not equal of bargaining power. In
the above view, it is clear that object or
consideration of clause 19 (a), 19 (b) and
19 (bb) is opposed to public policy and is
unlawful
and
void.
The
impugned
termination orders of their services
without complying with the provisions of
section 6-N of the Act, 1947 is illegal and
violative of principles of natural justice. It
was apparent on the face of record that
section 6-N of the Industrial Disputes Act,
1947 was not taken recourse to by the
employers and thus being violative of
section 6-N of the said Act. Therefore,
writ petitions filed under Article 226 of
the Constitution praying a writ of
certiorari is maintainable even against the
company. It was further submitted that
under section 4-A (1) of the 1946 Act the
State government may by notification in
the official gazette constitute Labour
Courts for adjudication of industrial
disputes relating to any matter specified in
the first schedule and for performing such
other function as may be specified in the
first schedule and for performing such
other function as may be assigned to them
under this Act. Thus, the jurisdiction if
conferred upon the Labour Court to
adjudicate the propriety or legality of an
order passed by an employer under the
Certified Standing Orders. Thus, the
Labour Court under section 4-A of the
Act are competent to hear and adjudicate
matters falling in the first schedule as well
as the Industrial Tribunal under section 4A of the 1946 Act.

15. He further submitted that the
Hon'ble Supreme Court in the case of
Rajasthan Transport Corporation (supra)
has held that Certified Standing Orders
framed under and in accordance with the
Industrial Employment (Standing Orders)
Act are statutory imposed conditions of
service and are binding both upon the
employer and employees, though they did
not amount to statutory provisions. This
case did not consider the case of Hon'ble
Supreme Court in D.K. Yadav (supra),
nor D.T.C. v. D.T.C,. congress Mazdoor
nor Central Inland Water Transport
Corporation (supra) has been considered.
So far as the relief is concerned in
Rajasthan Transport Case also, it has been
held that it cannot be denied to an
employee. It was submitted that no
approval under Section 33 (2) (b) of the
Industrial Disputes Act, of his action has
been taken when the compliance of
section 33 (2)(b) is mandatory. The
provisions of Section 33 (2) (b) suggests
that
authority
before
which
the
proceeding is pending for approval of the
action taken by the employer has to
examine whether the order of dismissal or
discharge is bonafide. An order of
dismissal becomes ineffective from the
date of non-approval of the order of
dismissal,
which
contravenes
the
provisions of section 3 invites punishment
under section 31 (1) with imprisonment
and fine. The order of dismissal or
discharge being incomplete and inchoate
until the approval is obtained. It cannot
effectively terminate the relationship of
the employer and employees. If the
approval is not accorded by Tribunal, the
employer would be bound to treat the
employee and paying his full wages for
that period, as held by the Hon'ble
Supreme Court incase of Zadpur Zila
Sahkari Bhoomi Vikas Bank Ltd. v. Ram
Gopal
Sharma
and
others,
2002(4)
Supreme Bound Report page- 296.
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924 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
16. Sri R.N. Singh, learned Senior
Counsel further submitted that the learned
single Judge while allowing the writ
petitions vide judgment and order dated
1.11.1993 had upheld the claim of the
writ petitioners by holding that the
action/termination order has been passed
in gross violation and utter disregard of
the principles of natural justice, equity
and fair play, whereas another learned
Single Judge vide judgement and order
dated 27.4.98 had dismissed the other two
petitions on the ground of alternative
remedy. This Court, should adopt a view
,which advances the cause of justice, and
not the technical view of relegating the
writ petition as to the alternative remedy
of raising an industrial dispute, as the
employees/writ
petitioners
belong
to
weaker sections. Thus, he submitted that
the judgment and order dated 1.11.1993
passed by the learned Single Judge
allowing the writ petition should be
upheld whereas, the judgment and order
dated 27.4.98 be set aside and instead the
remaining two writ petitions which have
been dismissed should be allowed so that
justice be done.

17. Having heard the learned
counsel for the parties, we find that it is
not in dispute that Modipon Fiber
Company is a company incorporated
under the Companies Act and carries its
activities in accordance with the various
enactments. It is not a statutory company
as it has not been created under any
statute to carry out any specific purpose,
though it may be a public company
commonly understood in which the public
maybe share holders /member, but it does
not
get
the
status
of
statutory
company/corporation owned or controlled
by the State. On the other hand it is
engaged in the business of manufacture
and sale of fibers as any other private
person. The business of manufacture and
sale of fibers, which is carried out by the
company is not as a result of any statutory
provision. In the case of V.S.T. Industries
Ltd. (supra), a question arose before the
Hon'ble Supreme Court as to whether a
company which is engaged in the
manufacture
and
sale
of
cigarette
involved any public function so as to
make it amenable to writ jurisdiction
under Article 226 of the Constitution of
India. The Apex Court laid down the
principles when an activity of a ;private
body can be said to public function and
subject matter of judicial review. In para 7
of the reports the Hon'ble Supreme Court
has held as follows :

"In De Smith, Woolf and Jowell's
judicial
Review
of
Administrative
Action, 5th Edn., it is noticed that no all
the activities of the private bodies are
subject to private law., e.g. the activities
by private bodies may be governed by
the standards of public law when its
decisions
are
subject
to
duties
conferred by statute or when, by virtue
of the function it is performing or
possibly its dominant position in the
market, it is under an implied duty to
act in the public interest. By way of
illustration, it is noticed that a private
company selected to run a prison
although motivated commercial profit
should be regarded, at least relating to
some of its activities, as subject to
public law because of the nature of the
function it is performing. This is
because
the
prisoners,
for
whose
custody and care it is responsible, are
in the prison in consequence of an
order of the court, and the purpose and
nature of their detention is a matter of
public concern and interest. After
http://www.allahabadhighcourt.nic.in
3 All] G.M., Modipon Fibre Co. V. Narendra Pal Gahlot 925
detailed discussion, the learned authors
have summarized the position with the
following propositions.

1)
The test of whether a body is
performing a public function, and is
hence amenable to judicial review, may
not depend upon the source of its
power or whether the body is ostensibly
a 'public' or a ' private body.
2) The principles of judicial review
prima-facie govern the activities of
bodies performing public functions.

3) However, not all decisions taken
by bodies in the courser of their public
functions are the subject matter of
judicial review. In the following two
situations judicial review will not
normally be appropriate even though
the body may be performing a public
function.

(a) Where some other branch of the
law more appropriately governs the
dispute between the parties. In such a
case, that branch of the law and its
remedies should and normally will be
applied and
(b) Where there is a contract between
the litigants. In such a case the express
or implied terms of the agreement
should normally govern the matter. This
reflects the normal approach of English
law, namely that the terms of a contract
will normally govern the transaction, or
other relationship between the parties,
rather than the general law. Thus, where
a special method of resolving dispute
(such as arbitration or resolution by
private or domestic Tribunals) has been
agreed by the parties (expressly or by
necessary implication), that regime, and
not judicial review, will normally govern
the dispute.

The Apex Court further held that -
In the present case the applicant is
engaged in the manufacture and sale of
cigarettes will not constitute any public
function. The requirement in setting up a
canteen when the establishment has more
than 250 workmen is only a condition of
service relating to a workman providing
better facility to work and to discharge
their duties properly and maintain their
own health or welfare. In other words it is
only a labour welfare device for the
benefit of its work unlike a provision
where Pollution Control Act makes it
obligatory even on a private company not
to discharge certain effluents. In such
cases public duties is owed to the public
in general and not specific to any person
or group of persons. Further the damage
that would be cause in not observing them
is immense. If merely that can be
considered a part of the conditions of
service of a workman is violated then we
do not think that there is any justification
to hold that such activity will amount to
public duty.

18. In the case of Workman of
Pepsico (supra) this Court had held that
no public duties is involved where private
company terminated the services of its
employees and the writ petition is not
maintainable. Similar view was taken in
the case of Heera Lal Sharma (supra) and
Raj Pal (supra).

19. So far as the contention
advanced by Sri R.N. Singh, that
Modipon Fiber Company has been
incorporated under the provisions of
companies Act and is governed by the
said Act and various other enactments
while discharging its day to day functions
and the general public is interested in its
affairs as it is treated as a public company
is concerned, suffice is to mention that the
http://www.allahabadhighcourt.nic.in
926 INDIAN LAW REPORTS ALLAHABAD SERIES [2002
said company has not been created under
any statute for discharging any specific
purpose. It is just like any other company
doing businesses in the country. It is not
involved in discharging any public
function or duty while terminating the
services of its employees as held by the
Apex Court in the case of V.S.T.
Industries (supra). Thus, the writ petition
is not maintainable against a private
company. The decision of the Hon'ble
Supreme Court in the case of Sukhdeo
Singh and others v. Bhagat Ram 1975 (1)
SCC-421, relied upon by Sri R.N. Singh
would not be applicable to the facts of the
present case, in as much as the said case is
related to Corporation constituted under
specific enactments and were owned and
controlled by the State. Thus, the
corporations were held to be covered
under the term state as defined under
Article 12 of the Constitution of India and
it was held by the Apex Court that the
order of removal from service of an
employees of the said Corporation in the
contravention of regulations framed under
the respective Acts would enable an
employee to approach the Courts for a
declaration against the Corporation for
continuance in service. Thus, we are of
the view that the company is not
discharging any public function while it
terminated the services of the writ
petitioners. In this view of the matter the
writ petitions filed by the employee-writ
petitioners was not maintainable.

20. So far as the decision of the
Hon'ble Supreme Court in the case of
Whirpool
Corporation
(supra)
is
concerned, in the aforesaid case, the
action of the Registrar, Trade Mark in
issuing
notice
to
M/s
Whirpool
Corporation was under challenge as being
wholly jurisdiction. The Apex Court
repelled
the
objection
regarding
alternative remedy.

21. Before the Apex Court, the
question of discharging of public function
by a private body and its amenability to
writ jurisdiction under Article 226 was
not involved. In the case of Pradeep
Kumar Singh (supra), the employee was
terminated from service by U.P. State
Sugar Corporation, which was held to be
a State within the meaning of the term
'State' as defined under Article 12 of the
Constitution of India and therefore, the
writ
petition
was
entertained.
The
decision of the Hon'ble Supreme Court in
the case of Anadi Mikta Sadguru Shre
Muktajee Vandas Swami Suwarna Jayanti
Mahotsav Smarak Trust and others v.
V.R. Rudani and others relied upon by Sri
R.N. Singh, would be of no assistance of
him as it has already been held by us that
the company is not discharging any public
function, so as to make it amenable to its
writ jurisdiction. Moreover, the aforesaid
decision has came up for consideration
before Hon'ble Supreme Court in the case
of V.S.T. Industries Ltd. (supra), the
Hon'ble Supreme Court has held that in
Anadi Mikta's case, this Court examined
the various aspects and the distinction
between an authority and a person and
after analysis of that decision referred in
that regard came to the conclusion that it
is only circumstances, when the authority
or the person performs a public function
or discharges a public duty, Article 226 of
the Constitution can be invoked, since it
has already been held in the present case
that the company is not discharging any
public duty or performing any public
function, Article 226 cannot be invoked.
The decision of the Hon'ble Supreme
Court in the case of Sudhir Chand Sarkar
v. Tata Iron and Steel Company Ltd. and
http://www.allahabadhighcourt.nic.in
3 All] Syed Takhleekh Hyder and others V. Naziruddin and others 927
others (supra) wherein the Hon'ble
Supreme Court has held that the Certified
Standing
Orders
become
statutory
condition of service and if any provision
of such rules read with Certified Standing
Orders
confer
absolute
unfettered
discretion on the employer to allow or
disallow rightful claim of the employees
would be unfair and unreasonable and
also subject to test of Article 14;and the
Court
can
judge
the
fairness
and
reasonableness
as
of
the
Certified
Standing Orders and declaration is bad
and an enforceable the proceedings arose
out of a suit and not under writ
jurisdiction. The Hon'ble Supreme Court
in the case of Rajasthan State Road
Transport Corporation (supra) has held
that the Certified Standing Orders framed
under and in accordance with the
Industrial Employment Standing Order
Act
1946
are
statutorily
imposed
condition of service and are binding both
upon the employees and employers,
though they do not amount to statutory
provision. Any violation of these Standing
Orders
entitles
an
employee
to
appropriate relief offered before the
forum created by the Industrial disputes
act or by the Civil Court. Thus, the
Certified Standing Orders being not a
statutory provision, though they are
statutory conditions of service, any
violation thereof by a private body not
discharging any public function or public
duty are not amenable to writ jurisdiction
under Article 226 of the Constitution of
India and cannot be challenged straight
away before this Court. Thus, the writ
petitions being not maintainable, are
liable to be dismissed.

22. Since we have held that the writ
petition itself were not maintainable, we
are not going into merits of the matter and
leave it open to the writ petitioners to
raise
their
grievances
before
the
appropriate forum.

23. In the result, the special appeal
nos. 803, 804 and 809 of 1993 are
allowed and the judgment and orders
dated 1.11.1993 is hereby set aside and
the writ petition nos. 18116 of 1993,
18117 of 1993 and 18118 of 1993 are
dismissed. Special Appeal Nos. 413 and
415 of 1998 fail and are hereby dismissed.
---------
ORIGINAL JURISDICTION
CIVIL SIDE
DATED: ALLAHABAD 21.11.2002

BEFORE
THE HON'BLE S.K. SEN, C.J.
THE HON'BLE S. RAFAT ALAM, J.

Civil Misc. Application No. 23 of 2002

Syed Takhleekh Hyder and others

 ...Applicants
Versus
Naziruddin and others ...Opp. parties

Counsel for the Applicant:
Sri J.J. Munir

Counsel for the Respondents:

Code of Civil Procedure- Order 43 (i) (t)
read with order 41 r. 23- scope of
Appeal- application to rehear the appeal
rejected- such order is appealable- court
declined to interfere under Article 227 of
the Constitution - question of limitation
shall be dealt liberally.

Held - Para 4

In the instant case the appellate court on
consideration of facts declined to re-hear
the appeal and found that no sufficient
cause was made out for such re-hearing.
Accordingly, we are of the view that the
proper course for the applicants is to